Irish banks - an omen?

Ai, my pension money.
These banks are toast.

This is what happening on the Emerald Isle this morning:

Allied Irish Banks market cap - €828m
Bank of Ireland market cap - €572m
Irish government’s capital injection - €3.5bn for each bank

The Irish government doesn’t want to take control of the banks.
That’s noble. Only thing is that they try to recapitalize with the wrong type of capital.
Alex Potter wrote already in December:

Much as the government and banks consistently describe this as core Tier 1(which it is), it is not equity Tier 1 which is an important difference in the capital structure of the banks. Firstly, it does not share the equity dividend nor confer control (ex-ANGL) therefore meaning Irish taxpayers lose out on potential upside as the Irish economy reflates at some point in the future. This differs from the UK bailout. Secondly, equity would likely be better received by ratings agencies and the funding markets.

Not good at all.
No, sir. Sphere: Related Content